What happened

Shares of ImmunoGen (NASDAQ:IMGN) were soaring 14.8% higher as of 11:20 a.m. EST on Tuesday. The biotech provided its third-quarter update last Friday. While its financial results were nothing to get excited about, investors cheered its progress with a late-stage clinical study evaluating mirvetuximab soravtansine in treating platinum-resistant ovarian cancer patients whose tumors express high levels of folate receptor alpha. ImmunoGen stock rallied after its Q3 update, with the momentum continuing through today.

So what

There can be a "follow the herd" mentality with investing in stocks. That can especially be the case for small-cap biotechs like ImmunoGen.

Man holding hand with image of a arrow pointing up and bar chart trending up appearing over his palm

Image source: Getty Images.

It has endured a rough stretch since announcing in March that mirvetuximab failed to meet the primary endpoint in its Forward I phase 3 study in treating ovarian cancer. But the company's update on Friday that it expects to soon enroll the first patient in another late-stage study for the drug -- one that CEO Mark Enyedy said could increase the chances of a positive outcome -- is certainly good news for the beleaguered biotech.

Investors responded to Enyedy's optimistic outlook with a spark of hope that mirvetuximab still has a shot at success. And it seems that this spark has become a flame with even more investors scooping up shares, with renewed optimism about the biotech's prospects.

Now what

It's still way too early to know how mirvetuximab will actually fare in the current late-stage study targeting ovarian cancer. Buying ImmunoGen stock at this point is very risky and something that only aggressive investors will even want to consider.